Friday, March 7, 2014

Movin' On Up Timing is Everything...But Not in the Way You Think




It's a question every homebuyer faces: When's the best time to purchase a home?

To answer that question, you need to consider not only seasonal trends, but also where you're at in your life. The information below breaks down the benefits and drawbacks of different seasons—and offers a better way to frame the question.

Spring and Summer

Benefits: Spring and summer are popular seasons for home shopping. In fact, the National Association of Realtors reports that most home sales take place between April and July. That's not much of a surprise, since many buyers are reluctant to uproot children during the school year or to deal with moving during a chilly month. Since spring and summer are so popular for home sales, more sellers also put their homes on the market during those seasons—which means more inventory for you to choose from.

Drawbacks: The increased activity in spring means you'll be competing with more buyers. So the best houses may move off the market faster than you're expecting. In addition, spring typically sees property prices at their peak. Another cost that may be higher in the spring and summer months is the cost to move—that is, to rent moving equipment or hire a mover, since those services are more in demand.

Fall and Winter

Benefits: Did you know that the holiday season can be a great time to make an offer on a home? That's because home prices can dip thousands of dollars in fall, and hit rock bottom during the dead of winter. In addition, fewer buyers are actively looking in the colder months, so sellers may be more flexible with their fixed price, since another offer may not come along any time soon.

Drawbacks: Winter also sees a drop in the number of homes available. In fact, home inventory usually falls about 15 percent in the winter, according to the National Association of Realtors. That means you'll have fewer options to compare and consider. So if you're determined to move in the fall or winter, you may not find your dream house on the market.

Reframe the Question

Remember, the only numbers that really matter are the ones you find in the neighborhood you want to join. So don't get too caught up in national home prices or sales numbers. Keep the focus local. And don't just think about saving money on a purchase price. You should also factor in tax credits or lending programs that could be to your benefit.

In addition, home loan rates change regularly for a variety of reasons. A mortgage professional can help you understand where rates are, how they've been moving, and what you qualify for. And that information may be more important than saving a little on the home price.

The Bottom Line

Timing the market doesn't matter as much as making sure the timing works for your unique situation. So focus less on the trends and more on yourself. Consider what stage of life you're in, why you want to move, and how your broader financial picture may impact—or be impacted by—a purchase.